By Jacqueline Renfrow
Guess’ reported net earnings in the second quarter of 2015 amounted to $22 million, a 50.5 percent year-over-year decrease. However, e-commerce afforded the brand some figurative sunshine, as sales were up 48 percent from last year.
Profit growth was especially scarce in the North American market, where revenues decreased 4 percent and comparable sales, including e-commerce, decreased 5 percent in U.S. dollars.
“Overall second quarter earnings were consistent with our expectations but were short of our operational goals due to a soft environment in North America, where traffic and promotional activity have continued to put our brick-and-mortar stores under pressure,” said Paul Marciano, CEO of Guess. “However, we are encouraged by our North American e-commerce business, which grew by almost 50 percent in the second quarter. So far in the third quarter, our fall collection in North American retail has not seen the traction with the consumer that we were expecting and we have adjusted our expectations for the back-half of the year accordingly.”
Guess is not the only brand seeing a boost this quarter in e-commerce sales. JCPenney (NYSE:JCP) announced that online sales jumped 16.7 percent in the second fiscal quarter, and Best Buy’s (NYSE:BBY) better-than-expected $8.9 billion in sales for Q2 was largely attributed to a 22 percent boost in online sales.
Total net revenue for the second quarter decreased 4.8 percent to $608.6 million.
The retailer reported a 4.1 percent decrease in North American revenue, which was down to $244 million. Net revenue for the company’s North American wholesale segment decreased 7.5 percent to $38.3 million.
On the heals of the fiscal reports, Marciano announced that Guess would close 50 of the 488 North American stores after reducing that figure from 507 one year ago, reported Woman’s Wear Daily. He felt the brand needed to adapt to retail today.
“In addition to these 50 stores, 50 percent of our North American store base will come up for renewal in the next three-and-a-half years, which will give us flexibility to optimize our real estate portfolio,” Marciano said during a conference call with analysts.
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Jarrett Neil Ridlinghafer
Founder & CEO/CTO
Synapse Synergy Group, Inc.